A Fair Trade music format

I have spent the better part of the last seven years working with artists, managers, labels and super fans at PledgeMusic, and I’ve had the privilege of exploring the artist-to-fan connection in its many forms. I have looked through this lens from multiple vantage points, from that of the fan, the artist, the label and the publisher, and I’ve also keenly observed the many advances in technology, data, Virtual Reality and the Blockchain.

That said, you don’t need to stand in my shoes to see that the music industry, on the whole is in turmoil and has halved in size financially in the last 15 years even as consumption and demand skyrocket. An industry that has made poor to no use of its most valuable and actionable data. An industry that when faced with a new technology, has historically been more likely to run from than embrace it.

The above is elegantly summed up by one of my favorite quotes from Stan Cornyn: “In the race to adopt new technologies, the music industry historically has finished just ahead of the Amish.” As much as I love the quote, I can’t help but think that’s unfair to the Amish.

No new technology encapsulates for me the potential for positive change for this suffering music industry more than the Blockchain. As such, I want to explore an idea that touches on this game-changing technology in an actionable way that I believe will benefit all in the musical ecosystem.

MINIMUM VIABLE DATA

The majority of the critical issues cited by music industry experts stem from a few sources, but a key problem area falls within transparency and clarity of ownership data, or metadata to be precise. Metadata in this case is the basic info that is needed to identify who wrote, performed, and owns the music that you listen to every day. This data and its accuracy are a vital means to ensure that creators and owners get paid for their work when their music is used.

Whether it is streamed online, broadcast in a coffee shop, licensed for a TV show, or played on an iPad, this data is the underpinning key or map, if you will, that leads back (in theory) to those who created and/or are invested in that musical work. It sounds like a simple thing to deal with in 2015. Just track all plays, and then pay who is owed for their work. But it’s not that simple.

Songs can have multiple writers, performers, publishers, and licenses, and even different usage rights by territory. A single song can sometimes have to pay out to multiple sets of people in different countries at different times through different organizations. To make matters worse, there is no central database anywhere in the world that tracks ownership. There are, in fact, multiple companies and organizations who keep multiple databases around the globe but much (if not a majority) of the data is often fragmented, incorrect, or out of date — leading to glacially slow payout times and pools of money sitting around with no one to claim it (or no way to claim it once it has been identified).

The situation, as it stands, is a mess. My favorite term for it is “the soup” and there’s a lot of it. It is estimated that the average digital music service makes between 20–40 million songs available to their listeners in a legitimate sense, and this excludes all of the mixes and user-generated content uploaded to the Internet with no data attached to it on a daily basis. In the case of EDM, Dubset estimates that 3.9 million hours of mix content is uploaded each week, each of which contains an average of 30 compositions whose owners are not being compensated. And that’s just EDM!

Let’s imagine a single centralized database of music rights, a database that contained all records of ownership, performance info, copyright ownership and usage rights, and make it open to all who seek to use it. It’s clear from the above that this would be pretty incredible, but also very difficult to build. Broadly speaking here are the main concerns:

Let’s imagine another scenario: that you could start again from scratch with the creation of a database that would contain the metadata for all of the music already in existence as well as all music going forward. This would be an open, public space in which creators are represented and/or can represent themselves, and in which companies who wished to use this music could simply find what they were looking for. It would also ensure that the creators and owners were being paid for their work as (and when) it is being used.

This would be what I would call a Fair Trade Music Database, one in which any song/entry contained within it would have to have Minimum Viable Data (MVD) attached to each work. Artists and rights holders could then argue that any music outside of this database that did not meet the Minimum Viable Data (MVD) standard would not be Fair Trade, as it would not contain enough rights info within it to constitute a fair use. Again it’s a nice vision, but how do you get through objections 1–5 above?

THE BITCOIN BLOCKCHAIN

Enter the Bitcoin and its Blockchain. If the above mentioned database were to be created on the Blockchain, it would be decentralized and owned by no single entity (and therefore, everybody). The Blockchain is a massive decentralized ledger containing all transactions from the Genesis Block (e.g. the first block of transactions in the ledger) to the latest block. Blocks are generated every ten minutes and are unchangeable. They are anchored in space and time by the entire network that runs the system, and transactions have a monetary value ascribed to them in Bitcoins (or to be more accurate fractions thereof). Each transaction is unique and identified by a unique address or hash, and every transaction is searchable by anyone should they wish to do so. All in all, it would seem that the Blockchain would be a perfect place to hold this massive Fair Trade Global Database of rights. Open to all. Owned by no one and with a permanent record of ownership stamped in place and time across hundreds of thousands of computers running the system.

To put it simply, if we could put every song’s MVD into a global decentralized database owned by all who interact with it, then this would start to solve a multitude of the music and content industry’s problems regarding ownership, payments and transparency.

SMART CONTRACTS

Blockchains also have another incredibly useful feature: the Smart Contract. Since this database is built on a trustless system, this allows for the creation of machine readable or “smart” contracts (like existing APIs) that can interact with the ledger and create and solve outcomes. For example, when a song is played “x” number of times, then “y” is payed to “z”. Or if a song is 25% owned by “a” and 75% owned by “b”, then a payment will be auto-split along this line and paid out once “c” uses have occurred.

If you were to add basic, Smart Contract-readable information to the MVD set, then you could allow third parties to interact with the entire database requiring less third-party slowdown of payments, and proof of work could be done instantaneously. Scenarios in which you could pay for only the amount of the song that you listen to could be created. Or payments in real time at a micro scale could exist (another great feature of Bitcoin).

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